SD's for-profit colleges devour GI Bill bucks

University of Phoenix in San Diego gets more than the entire UC campus system

The Center for Investigative Reporting yesterday (June 28) came out with a study of GI Bill funds flowing to for-profit colleges that fail state aid standards. "California is the epicenter of this problem with nearly two out of every three GI Bill dollars going to for-profit colleges," says the center.

San Diego fares poorly in the analysis.

"The University of Phoenix in San Diego outdistances its peers," says the center. Since 2009, the campus has received $95 million to educate Iraq and Afghanistan veterans, although it has been ineligible to get state aid. The $95 million is "more than any brick-and-mortar campus in America, and more than the UC 10-campus system and extension programs combined."

The graduation rate at the University of Phoenix in San Diego is below 15 percent and more than 25 percent of its students default on their loans, says the center.

The University of Phoenix in Costa Mesa is in second place among schools ineligible to get state aid, but getting the GI Bill money. It has received $82 million in the past five years. Two other San Diego campuses are in the top five: ITT Technical Institute in National City is third, with $40.6 million, and California College San Diego is fifth, with $21.5 million.

At the University of Phoenix's San Diego campus, "No instructor has tenure," and the vast majority of faculty members are part-time, says the center.

Since the GI Bill act passed in 2008, the University of Phoenix's corporate parent, Apollo Education Group, has spent $4.8 million in lobbying, says the center. San Diego-based Bridgepoint Education has spent $4.6 million. Orange County's troubled Corinthian Colleges spent $4.4 million on lobbying.

Securities and Exchange Commission filings show Bridgepoint "spent $871 million on marketing and recruiting over the last three years and took in $336 million in profit. Combined, that was more than the firm spent on instruction," says the center. Ashford University, which accounts for almost all of Bridgepoint's revenue, has received $110 million to educate Iraq and Afghanistan veterans in the past five years, says the center.

Comments

Here is a bit of further background on Ashford. I know an individual who was employed by them for a period of two years as a telephone recruiter. Interestingly enough, while the official word is that there are not numbers that must be reached in terms of signing people up for classes, unofficially, yes, there are quotas that must be reached. People are fired when those numbers are not reached within a certain time period. Of course, this is illegal.

I don't know if this could be proven, as there would have to be people willing to testify to that, and there appears to be a corporate culture that discourages that sort of thing.

Also, a while back when some of this negative publicity started emerging, apparently those in charge at Ashford shifted the responsibility of retaining recruited students to those who had signed them up. So, the phone recruiters added academic counselor and psychological and tactical counselor onto their list of daily responsibilities.

It is bad enough that these places use up all the GI Bill funding--but then, because of the expenses, loans are encouraged. Young people who are transitioning from active duty, needing to find a safe pathway for a career should not be taken advantage of in this way.
No one should be taken advantage of in this way.

The cynicism of these "for profit" institutions looks blatant to me.

I know that there are people who have benefitted from Ashford--but I believe the number who have been taken advantage of could be considerably larger than the number who have benefitted.

eastlaker: Thanks, but this did not involve any great reporting. I just picked out the most interesting items in the center's report.

I am hardly surprised by what your friend says about recruiting at Ashford. The Department of Education has been after its parent, Bridgepoint, for years. Bridgepoint insists it does not reward recruiters for their numbers. Balderdash, say many who know the company.

I have covered the for-profit universities for several years. There are a handful of schools specializing in technical skills that I might endorse. But taking them all into account, I consider it a gigantic ripoff of federal taxpayer funds.

I get a chuckle that so-called conservatives lead cheers for the for-profits, even as those alleged conservatives want federal spending whacked. As I have said many times, conservative businesspeople are against welfare if it goes to those who need welfare. If the welfare goes to fat cats, it's fine. Best, Don Bauder

Don, while I agree that these so-called universities should be shut off from any more federal money, there is a flip side to the story.

If the University of Phoenix has taken more federal funding than the entire 10 campus UC system, that means the UC has fallen down on the job, and massively. Likewise, the CSU system with about two dozen campuses is not on the ball. Why would that be? A rational person would expect both of them to want veterans and current service members as students, wouldn't you? I'd say it is obvious that they are not wanted, and that there is virtually no outreach or recruiting of them as students.

My take is that as students, the veterans and service members are less willing to swallow the current leftist ethos on college and university campuses, and don't buy the notions of what is politically correct today. On the whole they are likely better students, being older, more mature, and with better-defined career and life objectives. The faculty and administration would rather not have them around, stirring the pot.

This has echoes of the post-Vietnam war days, something I can discuss based on personal experience. Academia just is viscerally anti-military, and it spills over into everything. The bottom line is that our California tax-supported schools are shunning these people as much as they can, and leaving them open to the frauds being perpetrated by Bridgepoint, et. al. That is likewise a disgrace.

I have visited the Veteran's liaison office at San Diego State, and was favorably impressed. People are there, ready and willing to answer questions on the spot and help with all the paperwork. It seemed well-run, busy and the place to go for reliable advice.

One of the problems with the SU system in terms of educating former military is that the application period is very limited. Whereas a few years back, people could apply for admission for winter semester, now due to budget constraints, for the past several years, people can only apply for fall admission--and that I believe is still a one month time period in the fall--for admission the next fall/September. If someone is getting out of the military, that kind of timing can set them back, and sometimes people just don't want that kind of wait.

I think that the SU system should consider bringing back additional admission time periods, especially for post-military and transfer students, so that such students can start in January or even in the summer. (I know people can take open university courses, but those may not qualify for someone's "major".)

Like I said, I visited this office about a year ago, and everyone there was very welcoming, interested in answering any questions and very encouraging.

I do not know what is available at UCSD in terms of support for Veterans who are applying, or who are already admitted.

Visduh: You may be right that nonprofit state schools are not going after military veterans aggressively, but I have not heard that from anybody studying these education questions. While many military people may not like the leftwing slant at many state schools, they have a rational choice: go to a for-profit, pile up debt, and fail to land a job, or go to a state school, pile up a little less debt, and have a chance at getting a job.

Besides, are the engineering and technically-oriented courses of study at state schools biased to the left or the right? I doubt it. Best, Don Bauder

Long ago I noticed that these institutions promote the possibility of fast learning to prospective students. That is, attend here and you'll learn all you need in less time than at a non-profit school. This may be especially attractive to adults who just want to get school out of the way, so to speak.

People need to understand that learning takes time and there is lots that needs to be done to become ready for a new professional involving academic knowledge.

The University of Phoenix model provides (and some others such as National Univ) is attractive to the more mature 're-entry' student because it does not require adherence to the semester or quarter system. Instead, classes are offered in fast-rack modules of five-six weeks, enabling the participant to complete one (or two) class(es) quickly and move along. The model offers a more efficient path to degrees, something the public UC/CSUs have yet to adopt. Some community colleges have 'weekend college' type formats that provide some of the advantages of the modul-type system, but they are not widely offered and the curriculum offerings are narrow.

If our public institutions would offer course programming attractive to the mature adult, I think more of the veteran students would participate. For now, they want to get in, get out, and complete.

But what I don't understand is that I thought the new GI Bill is for 36 months, and all students need to be carrying a full load in order to qualify. How could taking one or two courses at the University of Phoenix be considered a full load? Is it allowed if a student has signed up to complete at least 4 classes in a 4 - 5 month time period?

Good point Eastlaker....I don't believe Phoenix has any limit on the number of classes that can be taken at once in order to allow the veteran student to qualify for full veterans educational benefits. Your comment above about the application/enrollment timeline at CSUs and UCs is also relevant ... it is much easier to apply at the privates because they want the money and as it has been noted, probably pay some sort of commission for the enrollment counselors.
Spaces at the publics are limited and enrollment is a more arduous and bureaucratic process.
I am aware that many community colleges have Veterans Service Centers which are designed to provide counseling and other support services to enrolling and continuing veteran students.

Students need 7 credits per semester to qualify as full time under the new GI Bill, which generally means three classes, as most classes are three credits. Not sure how that works for U of Phoenix, but I guess there is a way to make it work.

All good points. If the legitimate universities want to stop this abuse, they need to modify their application and acceptance processes. It isn't beyond the realm of possibility that they could streamline them for veterans and current service personnel, without making the same changes for everyone. Sure, spaces on some of the campuses (but not all, by any means) are in short supply. Sticking with the tried-and-true methods and class scheduling, much of which is straight out of the age of the horse and buggy, makes them progressively less relevant to many present-day students and degree aspirants. This is one of the times when some out-of-the-box thinking would be the best way to put the for-profit scammers out of business. Are you listening, President Hirshman? Chancellor Khosla? Anyone?

Visduh: Let's put this in a broader context. I believe -- and I'm not alone -- that there is entirely too much social pressure on young people to get college degrees. Universities have lots of students who don't belong there. In pressuring people to enroll, the for-profits quote the statistic that college grads will make more money over a lifetime. The statistic is accurate, but it shouldn't lead to people striving for degrees they aren't qualified for, or universities lowering their academic standards to push more people into and through the system. Best, Don Bauder

Actually, I'll go farther than you did. That correlation between being a college graduate and a higher income doesn't necessarily mean that there is a cause (education) -and- effect (income) relationship. Much of it could be the reverse, as in those with the best prospects for high income tend to get degrees first. Correlations are tricky that way. Even if the old model were true, can we count on it going forward? Past performance does not guarantee future results. Turning out ill-prepared degree holders by the millions only to have them chasing a diminishing number of jobs that "require" a degree is a formula for disappointment and a lifetime of attempting to pay off educational loans. It is also a formula for social distress and unrest.

Not too long ago, this notion of going heavily into debt to pay for a bachelors degree was widely praised. The assumption was that the recipient would earn such a bountiful income that paying the loans off would be a cakewalk. For most folks, that isn't the case. All the debt keeps many of them broke, unable to buy a home, and unwilling to marry and start families.

As a final point, even where more education did lead to higher incomes, the issue was one of averages. Not everyone with a degree will, or can expect to, earn more. In many cases, the best thing to do upon receiving a degree would be to head into an apprenticeship program--the same one available with no degree or college study at all--and hope for the best. We still need carpenters, plumbers, and electricians.

Hands on programs should be more of an option for those young people who are not interested in college...but because in the past, such programs were frequently used to slide some ethnic groups out of college prep, a residue of suspicion remains when such programs are brought up.

Yet--those programs do have a place in our world. They can be considered a type of safety net, so that those young people who need to pay their own way can find a way to do that early on...any perhaps support themselves on the way to trying some community college classes and/or figuring out what they are really interested in learning and doing.

That's why it was such a shame that Ed Brand wanted to cut out the ROP programs in Sweetwater--as it turned out, about 1/3 of that budget was saved, so students weren't actually left in the lurch. But it came very close.

We need more accountability in the educational system--from start to finish--because otherwise there will be people who will be there simply to take advantage, rather than support the educational system. Which is what we are seeing in many sectors of the for-profit institutions of higher learning and what we are seeing with Ed Brand and his Sweetwater real estate schemes. Corruption grows when people stop paying attention, and it is very difficult to stop it. Sort of the way a staff infection can eat away, undermining the overall health of an organism.

eastlaker: You make very good points. I have two college degrees (B.B.A. and M.S.) and I can't pound a nail straight, have zero sense of direction, could never be a plumber or construction worker or cab driver. I admire those who have skills in these areas. Best, Don Bauder

We're painting with a big brush here. The public higher education is well positioned to serve all adults: Community colleges to train locals for local jobs (think workers), State College/University system for regional education for business/agriculture/public service (think management), and the UC system which is actually more for research and development than teaching (arguably, but really, follow the money and read the charter). Public higher ed institutions are all over-enrolled and don't need to compete for "low information" education "customers" who just want a degree (think "Pay no attention to that man behind the curtain.") The government just feeds that beast with loans to commercial colleges, and my President Obama knows it. Nailing the student loan middle men was one of his first acts as President.
I know that California Community Colleges do make a sincere and very effective effort at integrating and accommodating service, working, and otherwise disadvantaged students. However, that is hardly comparable to the hard sell tactics the commercial college use to suck 'em in.

Then we need to get better information out there so people who can and should use their educational dollars better, will know what their options are.

But--there is the problem of waiting for that admissions window of application. Which is why I think it would help if the SU system would allow admissions at least twice a year, if not three times a year. Especially for ex-military and transfer students.

rehftmann: Correct. The government simply expands the problem by shoveling out more Pell grants and similar programs. Keeping young people in school may be a way to keep unemployment and unrest down. The unrest arises when they graduate loaded with debt and are unable to find worthy work. Best, Don Bauder

People making plans to attend university to earn undergraduate degrees need realistic understandings of a few things:

(1) What you learn in a classroom can be very different from what you do on a job. The name of a major may sound interesting, but it is wise to learn from people who actually majored in that area to find out what it is really like to have a degree in that field. Will you even enjoy it? What occupations are available for a graduate with that major? How difficult is it likely to be to find work that uses what was learned in that major? What room for career advancement can one expect? On average, how much can one earn to begin, and what is the long-term earning potential?

(2) Will an undergraduate degree be enough to get into a desired career? In our society, it is no longer unusual to have an undergraduate degree. By the time one earns a bachelor's degree, s/he may have simply moved from one big pool of candidates to another big pool without much advantage. For many fields today, a minimum of a masters degree is needed; for others, you must have a Ph.D.

(3) If a graduate degree will be needed, is it in a major for which plenty of financial aid (including teaching assistantships and assistant research positions) will be available, or will substantial debt be incurred?

Of course, there are more considerations than the few above. Unfortunately, too many young people do not figure these things out early enough, and the people (often students themselves) giving tours at universities are not prone to volunteer the information, assuming they even know the answers. All university administrators care about is getting more people registered so that the fees to attend can start rolling in. To administrators, a university is simply a business, and businesses exist to make money and grow.

Tip: If a prospective student really wants the scoop on what to expect with a particular degree and the path to getting it and beyond, find various seniors on a local campus who have successfully majored in that field, and ask them for the good and bad, and what job prospects they are looking at. (Many department's have student organizations that could be a good source of interviewees for this purpose). I suspect people like this would be glad to spend ten minutes telling a potential new student what they wish they knew when they started. Some faculty members can also be good sources of information on what it is like to actually to have a practical job in their fields especially if they have worked in industry before.

For a lot of young people, learning a trade would be far better suited to their aptitudes. Germany continues to do very well at this according to news story I heard on radio last year. What happened to trade schools here?

One of my sons, who now packs a BA from a major UC campus, a JD, and an LLM (that's a master of laws) recently said that nowadays a BA or BS is the new high school diploma. And what does that say for the high school grad? I'd say it means that he/she should get a degree just to be assumed literate and functional--the assumption about a diploma a generation or two ago. Does that sound like progress to you? I don't see it that way. I think it means that more years in the classroom are not bringing more understanding or skill, but are just keeping the young out of the labor force.

Visduh: I think you are right: a bachelor's today is equivalent to a high school degree many years ago.

One of my grandfathers was principal of a Chicago area high school (Elgin) for more than 30 years. One day, I picked up an English literature text from that time (about 1915). It was really difficult. Similarly, my mother taught high school English in the 1920s. She was well-versed in Chaucer and loved the poet Pope. Her classes were difficult. Best, Don Bauder

Here is an excerpt from a relevant article that appeared in The Wall Street Journal in May 2014: "Iowa Attorney General Tom Miller this month reached a $7.25 million settlement with Ashford University and parent company, Bridgepoint Education Inc.,...a publicly traded company based in San Diego. The state accused the school of leading students to believe that an online degree would allow them to become classroom teachers, without disclosing that additional coursework would be necessary."

Caveat emptor. For-profit schools spend their bucks on promotion and lobbying, not on strong faculties or student advising. They do that business-model thing: equating education with jobs and income -- which is not higher education's purpose. And they do expensive things like sponsor San Diego Symphony Summer Pops to gain legitimacy.

Most of the students who enroll at these places never finish, but they are still stuck with debt for loans incurred at enrollment. That's one reason these "schools" go after our all-volunteer ex-military folks: not only is G.I. Bill money waiting to be taken, the students are themselves young and vulnerable, with a high school diploma or equivalent, without mentors, tutors or life-experience other than in a theater of war. They are sitting ducks for exploitation by the for-profit so-called "university" which is selling nothing for something.

The feds seem to have been unable to regulate these G.I. Bill-funded private enterprises or to gain much data on student graduation rates, post-graduate employment or the extent of students' debt. Unlike their faculties, lobbyists for these businesses masquerading as universities are well-compensated for fulltime work.

monaghan: Right as usual. By and large, the for-profits have strategies for pitching vulnerable people with emotional arguments. Bridgepoint is one of the major recruiters of military people.

The federal government is, as you say, reluctant to stop this con game that is emptying the public purse. The for-profits have fat lobbying budgets. The business community backs them. The for-profits throw their money around to buy influence. Bridgepoint sponsors football games, for example, and recently distributed another big gift locally. It is a racket that the government doesn't have the guts to thwart. Best, Don Bauder

eastlaker: Tracking GI Bill dollars has always been weak. Back in my college days, the 1950s, there were multiple abuses of the GI Bill. But politicians would not want to be seen kicking a sacred cow, the GI Bill. So they milked it. So did many GIs who went to college until they flunked out, but had a helluva good time along the way. Best, Don Bauder

Susan Luzzaro: As noted above, privatizing K-12 would be a disaster. At the college level, the Department of Education has tried several strategies for providing accountability, but at the last minute, Washington backs down.

That's one reason the stock of Bridgepoint has been dominated by speculators, long and short. The Department of Education warns that it will crack down. The stock falls, the shorts grin. Then the Department of Education comes out with a program with few if any teeth, the longs grin, the shorts rush to cover, and the stock jumps again. Best, Don Bauder

Susan Luzzaro: Regulation has failed in for-profit education. At the federal level, the Department of Education talks a great game, then backs down and presents mushy programs.

Wall Street speculators take advantage of the department's pusillanimity. When the department threatens to give tough sanctions to a for-profit or group of them, the shorts knock the stocks down. Then when the programs turns out to be soft, the shorts rush cover and the stock soars. Bridgepoint is a classic example of that.

State regulators, by and large, have been better.

Gretchen Morgenson of the New York Times has a good column on Corinthian and weak regulation in the Sunday (July 14) New York Times. Best, Don Bauder

Don Bauder: There is a huge vocational education program, free and open to the public. It's the San Diego Community College District's Continuing Education Program. Tens of thousands of San Diegans profit (in every regard) by it. There are also many many occupational programs for college credit in San Diego's community colleges, offered at a tiny fraction of the cost of for-profit colleges. Public schools have little incentive to hustle students, they already have more than enough. So it would be helpful to have more public schools. But the public doesn't know what it's got and what it's missing. They are interested in red herrings like school shootings, tenure, and sports; they only know what they see on the evening "news." College is Harvard, the rest is a blur.
Public school instructors are almost always better paid, better supported with specialized counselors and equipment, and have far stricter hiring and professional development standards than private schools. In general, going to a private school (starting with K-12, extending to grad school) is simply a mistake. But then so is smoking, which is popular for the same reasons.

While the California community college system has much to offer young people with limited money -- including the opportunity to transfer to four-year state colleges or universities -- it does not treat its teaching cadres well. There is a heavy reliance on part-time teachers who receive no benefits and can virtually never qualify for full-time employment at a single campus. This common practice dilutes the community college experience for students and faculty alike and should be changed.

It's dangerous to encourage me, Don. I'll go on… The community colleges (over 100 in California) are on a campaign to give four year degrees. They're late to the party. A few years ago, the idea was life-long learning. Since a diploma is yesterday's news, the idea was, and still should be, that community colleges would be a accessible resource for people to always update life-skills, which need updating at an accelerating pace. IMHO, furthermore, based on a small and unscientific sampling of potential employers for my students, employers don't even look at resumes, and certainly don't give a poop about degrees. They want to see what you can do. Dodging reality in an institution of higher learning is no longer a serious job requirement for anything except working in an institution of higher learning. Better you show work experience with no gaps (like education). But back to the point of your story, government (and other large employers) push workers into stupid education, especially online education, especially especially online ed from a for-profit (who'd fail a customer?) with requirements for Continuing Education Units. Much of the jive education is pushed by CEU requirements and pulled by loans. Do the CEUs on a low-interest student loan and the payback for the bump in your pay grade is a quick, life-long gift, right through retirement. Whether you're a better employee is another question.

Don Bauder: All Grad's Ivy League Solid Gold Guarantee? You mean like my former President Gearge "One-of-the-Texas-Bushs" W. Bush? Time for the final exam: T/F 1. It's not what you know, it's who you know. 2. You automatically get to be one-percenter because A. you are a good, smart, hardworking person and that's what America is built on. Or B. You went to HarvardYalePrinceton with the CEO's kid. 3. Résumé is spelled with two accent marks because it comes from the French "liar liar pants on fire."

rehftmann: Look at the Ivy Leaguers on the Supreme Court. Dominant. Of course, the Ivy Leaguers are more likely to come from rich families with influence. That is one reason why they move up quickly in business. (Often, Daddy owns the company.) Best, Don Bauder

Susan commented about K-12 education becoming an area that for-profits will move into. It is ripe for that sort of thing, because it is now a big business and is getting bigger. Here in San Diego County it isn't necessary to look beyond the growth of private and parochial schools to realize that many people are abandoning the public schools and paying through the nose for something different. Within the past decade, the catholic diocese has gone into debt to build two new high schools with palatial campuses (Cathedral Catholic and Mater Dei) to replace two old and ramshackle operations (University and Marian.) Our Lady pf Peace Academy is now flexing its muscles in North Park and expanding its campus, after besting the city in a big lawsuit. Santa Fe Christian has expanded a great deal in recent years, as have Tri-City Christian and Calvin Christian. The Bishop's, La Jolla Country Day, and Francis Parker are all enjoying popularity, and charge plenty. And so it goes. The proof of the effect all this is having is the fact that enrollment in the SD city schools is declining, and the same thing is happening around the county. I think we can expect more private schools to spring up, and for some of them to be owned by for-profit corporations.

It doesn't take many one-percenters and wanna-be one percenters to make a school profitable, especially considering the relatively low pay, benefits, and support their teachers get. (Fabulous buildings and a budget to maintain the brand are typically "gifts.") It isn't the number of people opting for private (really) schools, it's the "dirty pooling" effect it has on public schools. It's not just that public schools get the students who are behind the eight ball (socio-economically, or physical and mental special needs, ow with behavior issues). It's that those students are, beyond academics, taught (imprinted is more like it) that they are not among the "public." As students and parents well know, you buy your way out of your culture's problems at the same time you buy into the oligarchy. So splits a society.

Right you are. It was that widespread use of free public education by all levels of society that made US residents into "Americans." Oh, the upper crust had its fancy private schools, and the Catholics had their schools, but in the main, most people went to school with everybody else, and saw all the different cultures and racial features and religious beliefs of the others.

Nowadays, an operation like the Bishop's is still begging for money, and in some cases getting it from those who would never have a family member attend the school, or have any reason to want to send a kid there. There might have been a time when an operation like that could have made a case for needing charity, but those days ended two or three generations ago.

rehftmann: You have hit the heart of the problem. By law, public schools have to take everybody. Private schools can pick and choose. When violence erupts at public schools, the word spreads quickly in the media. Enrollments at private schools grow.

It's similar in the hospital business. The publicly-financed hospitals have to provide a broad array of services. The private hospitals move in and specialize in profitable hospital services. Best, Don Bauder

Visduh: It's one thing for a K-12 school to be run by a church or by a longstanding local private organization. It is quite another to have companies such as Bridgepoint or Corinthian invade this market. Best, Don Bauder